Regarding the use of incentives as an influence on decision-making, which of the following is correct?

Question

BlackTom AI · Accepted Answer

When evaluating how incentives influence decision-making, it helps to distinguish between different types of incentives and what they aim to do. In this question, the provided correct option states: 'b. The imposition of a tax on cigarette consumption is a negative financial incentive.'

First, consider the idea of a financial incentive: money-related factors intended to influence choices. A tax on cigarettes increases the cost of that product, which tends to discourage consumption or shift decisions toward alternatives. This aligns with the concept of a negative financial incentive, where the financial penalty or higher price makes a particular behavior less attractive.

Why this is a reasonable statement: increasing out-of-pocket costs for a behavior (e.g., smoking) is a classic mechanism used in public policy to reduce that behavior. The higher price can deter consumption, encourage cessation attempts, or prevent initiation, especially among price-sensitive individuals. Therefore, labeling the cigarette tax as a negative financial incentive fits established definitions in behavioral and economic theories of decision-making.

Now, what about the missing options in the list? Without seeing the other choices, we cannot critique them specifically. However, typical competing statements might include ideas like a subsidy for healthy behavior (a positive financial incentive), non-financial incentives (e.g., social norms), or incentives that are not financial at all. In a complete analysis, we would compare each option against the definition of incentives and their expected effect on decision-making to determine which one is correct.

In summary, the provided statement correctly identifies a cigarette tax as a negative financial incentive because it increases the cost of the behavior, thereby discouraging it and influencing decision-making in the desired direction.

Regarding the use of incentives as an influence on decision-making, which of the following is correct?

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